How to Become a Better Trader
Whether you are self taught, have been in a professional trading environment for years or are just getting to grips with online trading, there is always something to be learnt. If you ever think that you know it all then you will never be a great trader. Always value what others can teach you and take advantage of experience. Here are a few tips to improving your trading skills.
Always Have a Plan
You should start out on day one with a plan of action. Your plan should consist of basic information such as how much capital you have to invest, where it is being kept and where you are getting it. It should also guide your style of trading, what you intend to trade in and what platform you are going to use to complete your trading activities. There are many trading platforms, which will provide you with all of the data you need to analyse and track your trades, keep records of losses and profits and maximise your potential income. Always base your trading plan on probabilities rather than gut instinct – it pays more in the long term.
Always Manage Your Risk
We all know that it is not worth risking money that you do not have. There is no such thing as a sure thing. Always know your risk profile. Be aware of how much capital you have available to invest, and never risk it all on one gut instinct. Split your capital into smaller parts and only use one part at a time on a trade. Always manage your risk before it manages you. Know when to cut your losses and when to carry on and gain from the profits. This is not something that you can learn to do in five minutes. It takes time and experience, but from it you will learn valuable lessons. You will not always get it right, but you should always have an awareness of your risk strategy at the back of your mind.
Keep Track of Your results
Good record keeping is a must. How will you learn from your previous track record if you do not know what you did or why you did it? It is also important to have a complete understanding of where you stand with your finances and what is available to you in terms of investment capital. Of course, you could argue that analysing your progress all comes down to one thing – how much profit have you made? But it also comes down to the knowledge and experience that you have gained and how you put that to use going forward. Learn from your actions and your results should improve over time.
Do not make the mistake of thinking that you will make vast profits instantaneously. It is unlikely that you will. Learn your trade at a service such as http://www.plus500.co.uk. Understand where you have made mistakes and develop your own style. Your efforts will go rewarded eventually.